Which organizations benefit when switching from a defined-benefit plan to cash balance plans?

Question

Quizplus · Accepted Answer

Organizations with many experienced employees benefit when switching from a defined-benefit plan to cash balance plans because cash balance plans are designed to provide more benefits to employees who are closer to retirement age and have a longer period of service with the organization. Therefore, organizations with many experienced employees can save on the cost of funding the benefits of younger employees and reduce the cost of funding retired employees' benefits by switching to cash balance plans.

Which Organizations Benefit When Switching from a Defined-Benefit Plan to Cash